RML Group reporting financial difficulties

Published:
17 November 2011

One of the two cement suppliers to Antigua & Barbuda has reported severe financial troubles, and the auditors of its latest published statements have expressed a concern that the pan-Caribbean company could collapse.

The concern is expressed in the notes that accompanied the interim statements covering the nine months ended September 30, 2011 and published in The Daily Observer yesterday.

“The RML Group (Readymix (West Indies) Ltd) has been excluded from the debt re-profiling and is expected to agree with its lenders to a return to scheduled debt service. However, until the re-profiling agreements are executed, the lenders have retained their rights to enforcement of their security which includes all the major productive assets of TCL and the Group. Accordingly, there is a material risk that TCL and the Group may not be able to continue as a going concern should lenders enforce their security,” the statement said.

TCL Group does not have an operations base in Antigua & Barbuda, but through the importer, Antigua Masonry Products (AMP), sales of its Arawak brand cement are significant.

The Trinidad-based company’s fight to remain a going concern has been waging at least since last year.“At the 2010 year end, Trinidad Cement Limited (TCL) was not in compliance with certain loan ratio requirements and as such was in default of its obligations under the various loan agreements. On 14 January 2011, TCL Group declared a moratorium on all debt service payments following which payments have not been made. However, recent debt restructuring negotiations have, according to the latest statement, led to all debts,” the interim financials said.

The group’s extensive operations cover subsidiaries in Jamaica and Barbados, and sales throughout Caricom. The directors are expressing hope that adequate cash flows and profitability will return based on ongoing pursuits of a number of new sales contracts and of cost saving strategies. Those sales and cost measures weren’t detailed, however.

In terms of impact on Antigua & Barbuda, AMP Managing Director Gary O’Rourke, who handles cement purchases told The Daily Observer yesterday that he didn’t anticipate any disruption of supply from TCL.

“As a matter of fact we loaded a ship yesterday (Monday). It’s fuelling in Barbados, and it’ll be up here in a couple of days – 1500t, and I don’t see where that’s going to affect us at all,” he said.

O’Rourke also said that AMP is confident that it could easily swap suppliers on the off chance TCL cannot fulfill its obligations to the Antiguan and Barbudan market.

“Caricement has a terminal here. They always have cement coming out of Columbia constantly. There’s a couple of suppliers in the Dominican Republic, so I don’t see that as being a hindrance right now,” O’Rourke said.